Post-Brexit EEA migration in the hospitality sector

By Yuichi Sekine, Emily Au

01-2019

In December 2018, employers and EU citizens welcomed the UK Government's White Paper on immigration, which detailed their vision of a future migration landscape providing the basis for the hospitality sector to employ workers from abroad, after Brexit. 

Set against a backdrop of speculation and uncertainty, the White Paper is a valuable roadmap of post-Brexit policy for employers and workers alike. Although the highly anticipated policy document is not binding on future legislation, it is considered to be the substantive basis for a Bill.

The broad policy direction advanced by the White Paper is for the current work visa scheme, applicable to non-EU workers, to be extended to EU migrants, with some adaptations to attract higher-skilled workers.

The proposals were preceded by and based on an empirical report from the Migration Advisory Committee (MAC), published in September 2018. The MAC's report set out a litany of evidence indicating the impact of EU migration on the labour market, productivity, prices, public finance, public services and local communities. Whilst much of this research is inconclusive, or shows little to no effect of migration on the UK, there is typically a positive effect of higher-skilled migrants on employment rates, wages, productivity and innovation.

Attracting high and medium skilled workers 

As a result, a key reform in the White Paper is aimed at attracting high and medium skilled workers over lower-skilled workers. Under the current migration scheme, most non-EU workers are granted the right to work under a Tier 2 (General) visa. This requires them to hold a job offer classed at skill level NQF 6 (degree level), which must additionally meet minimum salary thresholds. Under the Government's future framework, the skill level required will be reduced to NQF 3, and the minimum salary requirements will be reviewed. When these plans come to fruition, employers are likely to benefit from a wider recruitment pool, even after Brexit, particularly for those reliant on medium-skilled workers. In the hotel industry, the lower skills level includes hotel managers, grounds managers, catering and bar managers, waiters and chefs. Whilst this is considered a positive move for labour market competition, employers should be cautious to ensure they meet the salary thresholds, which are often demanding.

A number of the Government's changes support a loosening of restrictions on employers who are recruiting workers from abroad. The cap on the number of migrants that can enter the UK under a Tier 2 visa will be abolished, bringing greater certainty that employees who meet the salary and skills requirements will be granted the right to work, in turn allowing employers to plan ahead.

Employers will no longer be required to carry out the Resident Labour Market Test before recruiting a migrant worker. The demise of the costly and time-consuming test will be a welcome measure for employers, particularly in small to medium sized businesses, who often struggle with the administrative and financial burden of this process. 

Short-term workers

The Government has pledged to introduce a 12-month visa for workers from low-risk countries to enter the UK on a short-term basis. This migration route is intended as a temporary solution to fill labour market shortages, and will be reviewed in 2025. The creation of this visa is a significant concession made by the Government to mitigate the impact of Brexit on industries heavily reliant on low-skilled workers from the EU. It is notable that this short-term worker scheme was not recommended by the MAC, indicating that the Government has taken a realistic (and not purely economic) view on the needs of the UK labour force. 

In the hospitality industry, this visa route will allow for more low-skilled workers to fill vacancies, as there are no age restrictions, skills requirements or salary thresholds. This is positive news for those in the hospitality sector, as it will give employers time to adjust their workforce strategy in the long-term, for example by sourcing migrant workers through other visa routes. 

Other short-term visa routes for young people, sportspeople, charity workers and those in the creative sector will continue to operate, as they do now. A new UK-EU Youth Mobility Scheme, tabled by the UK Government, is under negotiation to permit 18-30 year olds to work or study in the UK for two years.

Low-skilled workers 

Low-skilled workers, who do not hold a job offer worth at least £30,000, are not provided for under the Government's plans. Instead, the White Paper envisages low skilled labour needs being satisfied by dependents of those on a skilled visa, those under the temporary work routes, students, or migrants on a family or youth mobility visa. These changes could be favourable for businesses, as it is often cheaper to hire workers under these routes. However, there are employers who fear they will not be able to continue recruiting EU nationals into low skilled jobs after Brexit and believe the proposed plans are not sufficient to meet their needs. The hospitality industry in particular would likely face a high churn rate of low skilled workers from the EU as they would most likely not qualify for a Tier 2 (General) visa at the end of their short-term visas due to the skill level required and the salary threshold. This is likely to result in higher cost for employers as they would need to rehire and retrain their EU workers when their short-term visas expire. 

The absence of a clear mobility scheme for low-skilled work is likely to result in a dearth of workers across a number of sectors. There is a pilot scheme to specifically provide for seasonal agricultural workers to work in the UK on a temporary basis, which is planned to be implemented from January 2019. However, no similar scheme is available for the hospitality sector at this time, although in the short-term, the 12-month visa route may assist, as explained above. Employers who are reliant on EU workers for customer service, cleaning, housekeeping or administrative occupations should ensure that their existing workers retain the right to work post-Brexit (by registering for the EU Settlement Scheme) and should consider a more diverse long-term recruitment strategy, from the resident labour market or younger migrants. 

Next steps

The rights to move and work freely between the UK and other EU countries will cease on 29 March 2019, under a new UK law to be enacted, the Immigration and Social Security Co-ordination (EU Withdrawal) Bill.  Migration of EU citizens is expected to play a critical role in Brexit negotiations, and it remains possible that UK migration policy will deviate from the White Paper, to favour EU workers. In the face of these ongoing negotiations, the legal provisions enforcing the proposed immigration system are not anticipated until the second half of 2019. Bird & Bird will be providing regular updates on our website, and through our monthly newsletter, Frontline.

As an industry reliant on migrant workers, employers in the hospitality sector would be well-advised to begin planning their post-Brexit workforce needs as early as possible, to facilitate the development of an optimum compliance strategy. All businesses should anticipate a costly administrative process to retain the ability to hire from abroad, although the details of the extent of this are yet to be determined. Those reliant on high and medium skilled workers can expect a migration scheme to be in place to cater for their requirements. However, recruitment for low skilled work may need to be more strategically directed at younger migrants or the resident labour force.

Employers who have yet to obtain a licence from the Home Office to sponsor migrant workers may wish to consider applying for one as early as possible, to avoid the inevitable rush of sponsor licence applications when EU nationals become incorporated into the existing Tier 2 visa scheme.

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